California’s Department of Cannabis Control (“DCC”) finalized new regulations in September of 2021. Part of the new regulations included new procedures for trade samples. Below is an overview of the Trade Sample regulations; be sure to review the regulations in full before implementing a Trade Sample standard operating procedure.
What is a “Trade Sample”?
A trade sample is defined as “a limited amount of cannabis goods that has been designated by a licensee to be provided to other licensees for the purposes of targeted advertising.” (§15041.2(a)). §15041.2(b) further sheds light on the definition of “Trade Samples” by indicating that they are provided for the “purpose of providing the recipient licensee with product information to aid in making purchasing decisions about new or existing cannabis goods.” (§15041.2(b)) Here are a few key takeaways:
- Trade samples refer to licensee to licensee transactions; trade samples cannot be provided to consumers.
- Retailers often require distributors to provide a small amount of discounted flower to be used in the dispensary’s display cases. This discounted flower would likely not qualify as a trade sample because it is provided after a purchasing decision has been made and for the specific purpose of displaying flower in the dispensary. In other words, its not provided for “targeted advertising” purposes.
The regulations limit (1) the total amount of a cannabis goods a licensee can designate as trade samples each month (irrespective of which licensee(s) the samples are going to)and (2) the amount of trade samples a licensee can provide to a single licensee each month.
Total Amount Each Month
- Dried Flower: a total of two (2) pounds (§15041.7(a)(1))
- Manufactured and nonmanufactured cannabis products: a total of 900 individual units. (§15041.7(a)(2))
Total Amount Each Month for a Given Licensee
- For cannabis in the form of dried flower, five (5) grams per strain and no more than six (6) strains to each recipient licensee; (§15041.7(c)(1)) and
- For manufactured and nonmanufactured cannabis products, five (5) individual units, as packaged for retail sale, per cannabis product line and no more than six (6) individual cannabis product lines to each recipient licensee. (§15041.7(c)(2))
Trade samples must be tested and designated as trade samples in METRC. They must meet all packaging and labeling requirements, and also be labeled with the following language:
“TRADE SAMPLE. NOT FOR RESALE OR DONATION.”§15041.5(c)
Transportation of trade samples must be transported in accordance with all transportation regulations with one interesting exception: employees may transport trade samples in a vehicle that is not registered to the licensee and that does not meet the “fully enclosed box, container, or cage” requirement of section 15311(g). Regardless of the vehicle used to transport trade samples, drivers must abide by the possession limits set by Health and Safety Code section 11357.